How do you manage inventory in eCommerce?
Whether you're selling phone chargers, gourmet pickles, or high-end jewelry, having an adequate inventory to meet demand can help keep your business afloat.
Summary
Inventory management includes the processes and activities that occur between the time you receive your inventory and the time you sell it to the final customer. Small changes in inventory management can have a big impact on your bottom line, for better or worse. Done right, inventory management can boost sales. On the other hand, a missed opportunity can result in losing money.
1..What is product management?
Inventory is the product that you own and plan to sell through your business.. This affects how products are received, stored and processed to prepare them for sale. Inventory is an investment. The results of poor inventory management may not become apparent for weeks or months.
When they become evident, it can lead to disaster: damaged products, dead inventory, high storage costs or, worse, out of stock and unfulfilled customer orders. In addition, storage and holding fees can reduce your profits.
2..How many warehouses does Amazon control?
Globally, Amazon operates more than 400 fulfillment centers, more than 150 processing centers, and more than 1,000 delivery stations worldwide.
3..How much money is given to other retailers in the warehouse?
- At approximately 800,000 square feet, the distribution center can accommodate more than 1,500 full-time associates. **Ranging in size from 600,000 to 1 million square feet, the independent distribution center employs more than 1,000 full-time associates.
- Many companies span 28 ballparks and can handle tens of millions of items per day.
4..What new features has Amazon created to help business owners?
Amazon invested $15 billion and released 225 new tools and services in 2019 to help other retailers around the world, especially small and medium businesses, grow and thrive. "Over the past few years, Amazon has invested more than $30 billion in its distribution network and fulfillment technology. These improvements include adding 35 million cubic feet of space to the distribution center.
5..What are Inventory Management Systems?
Inventory management systems track products from source to shipment. An inventory management system can help you make critical business decisions such as how many units you need, your optimal inventory level,
When to restock, and which products to stock or remove. A good inventory system can give you an accurate picture of what you have and help you run your business efficiently. Inventory systems can be a combination of manual accounting and accounting, spreadsheets, or automated digital solutions.
When the system is working properly, you know what kind of products you have, as well as important metrics like available shelf space, quantity of inventory, and storage space for each product.
6..One channel inventory management
For sellers who sell across channels and websites, Amazon offers free software called Veeqo that syncs and stores inventory across channels, locations, and FBA. When you sell on one channel, Veeqo ensures that your product level is reduced across all of your channels, preventing sales.
7..Why is inventory management important?
Inventory of stock is a business asset. But inventory can also hurt your business if not used properly. As your business grows, you may encounter problems such as:
- The product is overstocked
- Inventory level is low
- Software is stuck or dead
- Damage
- High security costs
8..Excess goods
- List of limits
Having enough inventory to ship customers quickly is a good thing; However, having too much inventory can hurt your business.
Excess inventory costs your business money by tying up resources and increasing storage costs. There is an opportunity cost to holding a large inventory. In addition to incurring unnecessary costs, you may not be able to respond quickly to changes in customer demand, while aging may force you to adapt.
- More than 90 days supply
- At least 1 minute past 90 days
- Best ROI opportunities (like lowering prices to increase sales)
These strategies can help your e-commerce business avoid holding excess inventory through increased sales.
9..Inventory level is low
On the other hand, having enough units to meet the needs is important. Low inventory levels can hurt your sales and brand. No one likes to order something only to have it turn out to be missing.
The right inventory level for your business may depend on the season, market history or customer demand. Run a strategic analysis to reach the best inventory level.
10..Hardware is stuck or dead
Targeted inventory is a salable product that may be in a distribution center or warehouse but is not listed for sale on your site. This hurts your business because it hinders your cash flow. You pay for these products, you pay for security, but customers can't buy them. The inventory that is targeted is three-fold: lost sales, product costs and lack of storage capacity.
The Stranded Goods tool in Amazon's inventory system can help track and resolve the three stranded and dead issues.
11... Illness
Some items such as food products, supplements or cosmetics have expiration or expiration dates. When you hold on to a product past its expiration date, your investment slows down.
Tracking your items through the system can help you avoid damage, allowing you to offer improvements or reduce the risk of damage in the near future.
12..Savings are high
Maximizing your savings can help you cut costs on fast-selling items. Not needing your inventory can lead to significant storage, disposal and destruction costs. Even if you use third-party inventory management systems like FBA, you still want to keep track of how much money you have on hand to avoid incurring unnecessary charges.
13....Amazon Inventory Management Dashboard can help your business manage inventory more effectively
For FBA sellers, Amazon offers a direct inventory management facility at Seller Central. These tools help entrepreneurs and e-commerce businesses manage inventory efficiently and provide faster fulfillment.
The inventory performance dashboard sends alerts when inventory levels are low and provides strategies and forecasts to estimate optimal inventory levels and shipping times. The dashboard displays important inventory information such as sales rates, inventory aging status, and recommended actions to increase safety.
This facility is included in your seller account and is accessible through Seller Central and the Seller mobile app.
14..How do Amazon products work?
When sellers choose to use FBA, they get instant access to Amazon's machine-based inventory management system. This system uses information such as selling prices, shipping times and Amazon data to predict what customers are looking for and set the best inventory levels.
15..Upgrade your IPI score to reduce security costs
Just as a high credit score will benefit you, so will a high stock score. On average, retailers with high IPI scores typically pay less than 1% in security fees as a percentage of their revenue. Keep your IPI score high to reduce maintenance costs and get more profit. An
Amazon IPI score above 400 reduces your savings and gives you additional savings at Amazon fulfillment centers. The reserve ratio changes quarterly based on sales volume, IPI scores, and processing capacity available. This can help you reduce your costs and increase the number of products you can sell on Amazon with two-day shipping.
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